Japan will likely delay the realization of some of its new investments in Indonesia following Friday’s devastating earthquake and tsunami, a minister says.
Industry Minister MS Hidayat said Sunday that Japan may reschedule its new investments in infrastructure in Indonesia, including the development of the Metropolitan Priority Area (MPA).
Last year, Indonesia and Japan signed a memorandum of cooperation on the development of the Metropolitan Priority Area (MPA) worth ¥2 trillion (US$24.42 billion). In the deal, the Japanese government and private companies would finance the construction of infrastructure in
Greater Jakarta and surrounding areas. Construction was scheduled to commence in 2013.
“After the tsunami, Japan will focus on economic recovery after its industrial centers were paralyzed by the disaster. Decision-makers may want to change their priorities, including their investments in
Indonesia,” Hidayat told The Jakarta Post. He added that he expected the delays would not be too long.
Hidayat said his ministry had not received any information about delays in investments from their Japanese counterparts.
Meanwhile, Investment Coordinating Board (BKPM) chair Gita Wirjawan remained optimistic that the calamities would not affect Japan’s long term commitment to investing in the country.
“They have a strategic and long-term commitment in Indonesia. I'm sure the realization [of the new investments] will not be adjourned,” Gita told The Jakarta Post.
Earlier this month, Japan-based Mitsubishi Corporation expressed an interest in making an $18 billion investment over the next five years for various projects. The projects included car production, the development of infrastructure in the MPA project, a liquefied natural gas plant in Central Sulawesi in cooperation with state-owned oil and gas company PT Pertamina and private firm PT Medco Energi
Internasional and a ferronickel smelter in Maluku in cooperation with Eramet of France and state-owned mining company PT Aneka Tambang, according to BKPM.
Previously, BKPM also recorded that several Japanese companies applied for investment permits to build factories to produce auto parts and accessories in Indonesia.
Last year, Japan was the fourth largest foreign investor in Indonesia with a total investment of $712.6 million. (lnd)
